Empowering Indonesia’s renewable energy drive

April 11, 2023

SDG Impact Japan gains approval from the Ministry of the Environment, Japan for Indonesian hydro project.

With a shared vision of increasing renewable energy adoption, SDG Impact Japan has been selected by Japan’s Ministry of the Environment for the Financing Programme for Joint Crediting Mechanism (JCM) Model Projects in FY2022. This strategic move aligns with Indonesia’s ambitious goal of boosting its renewable energy share from 13% to over 23% by 2025.

Commitment towards GHG emission reduction through Small Hydro Power Project in Indonesia

Collaborating closely with PT. Raisan Energi Indonesia, a prominent hydro-power project development company, and Alamport Inc., SDG Impact Japan is at the forefront of developing a 3.5MW hydro-power project in Northern Sumatra, Indonesia.

By funneling the generated energy to PT. PLN, Indonesia’s main electricity provider, this project is expected to lead to an annual reduction of approximately 8,863 tons of CO2 emissions, fostering a cleaner and more sustainable energy mix.

This endeavor significantly supports Indonesia’s government-backed policy of encouraging investments in renewable energy infrastructure to drive its environmental targets. Additionally, the project will play a pivotal role in fulfilling carbon reduction goals as stipulated by the Paris Agreement. It will issue carbon credits under the JCM, in accordance with Article 6.2, to aid both Japanese and Indonesian governments in their pursuit of greener emissions profiles.

The Ministry of the Environment in Japan’s implementation of JCM Model Projects is a strategic initiative aimed at providing essential financial support, covering up to half of the initial investment costs. This initiative is geared toward enabling projects that leverage cutting-edge decarbonization technologies in developing nations. The outcome is twofold: a reduction in global greenhouse gas emissions and the acquisition of JCM credits to advance Japan’s and partner countries’ emission reduction targets.

At SDG Impact Japan, our overarching mission is to cultivate a sustainable and resilient society by fostering sustainable finance. Against the backdrop of COP27 in 2022, which emphasized support for climate-affected developing nations, this project holds the potential to usher both Japan and Indonesia into an era of carbon neutrality and eco-conscious transformation. The JCM credit system will facilitate Japan’s carbon offset while also stimulating decarbonization investment from Japan to developing nations.

Project Partners

PT Raisan Energi Indonesia is devoted to a 3.5 MW hydropower project in North Sumatra, Indonesia. It has already solidified a long-term power purchase agreement with PLN, a state-owned power company. The company aims to finalize the project by January 2025, following civil engineering tasks and turbine equipment procurement.

Since its establishment in 2015, Alamport Inc has focused on driving renewable energy projects aligned with local requirements, particularly in Indonesia. Their expertise spans solar, hydropower, and biomass projects.

Wataru Baba
Managing Partner

Senior Fellow, Climate and Sustainability at Panasonic Group since 2022, where he accelerated the company’s growth through an integrated strategy for creating positive impact on climate change and established Sustainability Committee, chaired by the Group CEO. Board Member of Japan Professional Football League (J.League) and Independent Director for a civic technology nonprofit, Code for Japan, and a web3 startup, Financie, Inc